Do manufactured homes appreciate in value? Maybe yes and maybe no, it all depends on where it’s located, its age and how well it’s maintained.
Since Don and I are sharing our experience as first time manufactured home buyers, I’ll start with some facts about our California home’s current value. We own our home but rent or lease the land where it’s located in a 55+ senior manufactured home community. Just six months after buying our 1500 square foot multi-section home for $130,900.00, we would ask for – and likely get - a minimum of $185,000.00 if we decided to sell.
Neighbors just a couple of streets away from us bought their smaller manufactured home four years ago for $103,000.00 and just sold it for $143,000.00. Although this kind of increase for a new manufactured home is common in California, it’s not necessarily the case in all parts of the country.
No matter where you live, you should be able to determine whether your manufactured home has or will appreciate in value. The first thing to consider is the neighborhood where your home is located. According to research conducted by the Manufactured Housing Institute or MHI, a manufactured home will appreciate in value at the same market rate as other homes in the same neighborhood.
MHI has also outlined some of the market factors that affect appreciation. They include:
the housing market in which the home is located
the community in which the home is located
the initial price paid for the home
extras or additions put on the home
the age and maintenance of the home
the inflation rate
the availability and cost of community home-sites
the extent of an organized resale network
Photo provided by MHI
So, the first step in finding out what a manufactured home is worth is to look at other comparable homes in the neighborhood. Age of the home, the manufacturer, the basic condition of the home inside and out, extras and additions should also be considered. Identify and list any problems with the roof, appliances, air conditioner/furnace, water heater, etc. It’s also a good idea to request a professional written inspection from the roof to the crawl space.
The community where the home is located is another key factor in determining a home’s value. Is the community designed for senior citizens or families? What amenities and services are offered? How many homes are for sale in the neighborhood? Is the park fully developed or are new homes being sold? Is the home located on private property?
Usually the more the initial cost of the home, the higher the resale value. Newer manufactured homes are easier to price than older homes. Older homes are also more difficult to finance.
Clean, clutter-free and attractive homes are sure to be valued higher than those that aren’t. Well-maintained homes often translate into “serious money” as Don and I discovered when we sold our Florida home. We took simple steps such as painting the front door, cleaning up an oil spill in the driveway, washing windows, and sprucing up our landscaping to contribute to our home’s value and curb appeal. We also gave each room a good cleaning, cleared out the clutter and painted a few rooms to brighten them. All these steps helped increase the resale value of our home by quite a lot.
Let’s face it, there are some manufactured homes that are old, broken down or poorly maintained. The bad news is that these homes are not likely to appreciate in value. The good news, according to MHI research, is that most of today’s homes are appreciating just like site-built homes that are adjacent to them.
Unfortunately some people still believe that ALL manufactured homes depreciate or lose value over time. Another misconception is the belief that manufactured homes lower the property values of site-built housing in the same area. Both these attitudes are unfair and untrue.
I recently read a recap of several housing studies on the Manufactured Housing Institute website www.manufacturedhousing.org that have been conducted by the Joint Center for Housing Studies of the Massachusetts Institute of Technology, Harvard University, the University of Michigan’s College of Architecture and Planning and the East Carolina University Department of Planning. Basically, they draw the following conclusions:
l. Today’s well maintained manufactured homes appreciate in value at the same market rate as other well maintained homes in the same location.
2. The presence of manufactured home communities or manufactured homes on private property has no impact on the property values of adjacent site-built residential properties. These are the facts, not the myths.
Since our home is appreciating in value so rapidly we keep track of our insurance coverage to make sure it’s adequate to cover a loss. It’s our responsibility as homeowners to check the value of our home and make sure there is enough insurance to protect it. We think it’s a good idea to adjust our insured amount on a regular basis – just like we change the batteries in our smoke alarm.
Don and I will never move our manufactured home from its site in our rental community because its value is higher if we sell it with the attached two car garage and large attached patio area. In fact, a study by Foremost Insurance Company shows that most manufactured homes are never moved from a rental park or private property once they are put in place. If we ever decide to sell we will list it as a home for sale just like any other homeowner.
Bottom line is that everyone who owns a manufactured home wants top dollar when they sell it, but it’s best to be realistic in pricing. The resale of a manufactured home in a reasonable manner at a reasonable value is the thing to remember. Keep in mind that where a home is located, its initial price, age, maintenance, inflation, and availability all contribute to buying or selling a home to appreciate.
To learn more about superior insurance for manufactured homes visit Foremost.com. If you are an AARP member go to AARPForemost.com.
